Economy – Fake growth

Since independence Namibia has enjoyed steady – but deceiving – economic growth. Per capita income in 2010 was estimated at US$5600, a high figure compared to other African countries. However, numbers hide the reality, since there is great inequality in income distribution. 35% of the population lives below the poverty line, and over 50% lives on just US$2 per day, which do not take you very far in a country so dependent on imports of basic commodities. Most of the productive farmland is in the hands of a minority of white farmers. Similarly, most commerce and industry is controlled by a minority of whites and a small black middle class, while the mass of the population earns a meagre living from subsistence farming, from the service industry and from the informal sector. In the 1990s the economy grew at an average rate of 4.5%, but high population growth and inflation eroded many of the economic gains and meant that a majority of Namibians actually became poorer.

Namibia’s mining sector contributes around 10% of GDP, while tourism and the fisheries sector make significant contributions to the economy and agricultural output remains constant. However, these sectors have been unable to absorb the increasing Namibian workforce. Namibia is the world’s fifth largest producer of uranium, and a producer of large quantities of zinc, copper and lead copper. The diamond mines around Luderitz are the leading producers of gem-quality diamonds worldwide. There are significant reserves of silver, gold, tin, cadmium, vanadium, tungsten and germanium. The sector is dominated by large-scale foreign-owned companies, which employ a limited number of Namibians, while a large proportion of their profits flies overseas.
Agriculture is important in terms of the employment it provides. The most important component is livestock. Cattle farming is concentrated in the northern and central parts of the country. About 80% of Namibia’s beef is exported to South Africa and the EU. Agribusiness is a most emotive issue: under colonial governments much of the land was expropriated from the black majority to the benefit of a few white settlers. Today, just over 4000 white farmers own 48% of agricultural land under freehold title. Though these support up to 70,000 black families through employment, there is much resentment among a population left out in the cold. Namibia is a net importer of basic food crops and regularly imports up to 50% of its annual cereal requirements, mainly from neighbouring South Africa.The fishing industry is one of the largest in the world. The cold waters of the Benguela Current produce a nutrient-rich system which feeds few but populous species. White fish species are sourced along the continental shelf, while pilchard and horse mackerel are found in more shallow waters. The industry has yet to start exploiting the waters beyond the edge of the continental shelf. The industry has been heavily regulated by the government. Before independence, Namibia waters had been overfished by foreigner fishing companies. By introducing new quotas and awarding long-term concessions, the government has managed to facilitate the recovery of stocks while at the same time seeing its revenue grow each year. In the last few years the fishing industry has contributed about 7% to the GDP. As long as Namibia is careful in its management of its marine resources the sector will continue to be a valuable source of income.
Namibia has a wild and varied landscape ideal for upmarket, high-value, low-volume tourism. Since independence the country has enjoyed social peace, an important factor for the tourist industry. Many tourists are attracted to remote areas that are essentially ‘unspoilt’ and Namibia has an abundance of such areas. These are also the areas where the local communities have no employment opportunities and have suffered the most during periods of drought. If the right training can be provided, these people will be able to directly benefit from tourism. Today the sector contributes about 8% of the GDP and provides over 70,000 direct and indirect jobs. For future developments the government is looking closely at community- based tourism and the Namibia Community Based Tourism Association (NACOBTA) today oversees many successful projects where rural communities enjoy the benefits of tourism and conservation policies. Once people start to derive significant benefits from wildlife and conservation policies they are more likely to work with the government and private sector to preserve the environment. Rural households must enjoy a cash income as well as job opportunities. The small manufacturing sector is limited to the processing of meat, fish and minerals for export. Most other goods are imported from South Africa and thus the sector remains underdeveloped within Namibia.